October 29, 2009

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The public insurance option would typically charge higher premiums than private plans available in the exchange, according to the Congressional Budget Office analysis of the House bill.

That surprising conclusion raises doubts about Democratic promises that a government-run insurance plan would provide a lower-cost alternative to consumers. At the same time, it calls into question Republican charges that the plan amounts to government takeover of health insurance -- because only 6 million people would enroll in the plan, according to the CBO.

Here's the key passage from page 6:

Roughly one-fifth of the people purchasing coverage through the exchanges would enroll in the public plan, meaning that total enrollment in that plan would be about 6 million.

That estimate of enrollment reflects CBO’s assessment that a public plan paying negotiated rates would attract a broad network of providers but would typically have premiums that are somewhat higher than the average premiums for the private plans in the exchanges. The rates the public plan pays to providers would, on average, probably be comparable to the rates paid by private insurers participating in the exchanges. The public plan would have lower administrative costs than those private plans but would probably engage in less management of utilization by its enrollees and attract a less healthy pool of enrollees. (The effects of that “adverse selection” on the public plan’s premiums would be only partially offset by the “risk adjustment” procedures that would apply to all plans operating in the exchanges.)

No one seems to understand basic economics. Doctors charge as much as they can because they have to pay malpractice premiums and other fixed expenses. When payments from some types of patients are reduced they can either 1) raise the price on the others or 2) not offer service.
Why not consider malpractice insurance reform? Or maybe tort reform??
What generally happens when the government sets a price ceiling for a service is a shortage. Be ready for "even-odd" days at the clinic!

nonprofit cannot be higher...and those with insurance premiums means nothing..till one needs it...no guarantees it comes with..denied precondition...think you can afford it now..what about next year and the year after when premiums go up? all are just an accident away with insurance premiums..also..to being denied preconditon bankrupt or lose one job...no one knows what tomorrow will bring health wise or other wise...but can guarantee ..premiums will go up up up a great % one will be denied or preconditoin....believe me...THERE WILL BE "NEW" PRECONDITIONS COMING..... ...if no public option.........does insurance industry give those with premium insurance..a long list of what will make one be denied? Name them? a list of all their preconditons that can affect you? or surprise this is a new precondition....sorry ...sorry cannot cover full cost..sorry denied.........

What has been the profits of last 10 years with insurance industry? what is going to be the profits of next Ten years? If insurance industry is projecting a profit of $85 Billion this year now times that by 10 years..............................$85 Billion X 10 years= $850 Billion dollars in PROFIT........funny same amount of what it will cost for Health Care Reform Public Option.....difference.... your money is paying for public nonprofit public option....that will keep cost down.......either way one is going to pay...either for profits..or for Health Care Reform PUblican option...that forces all to be competive..and keep cost down..one nonprofit..the other excessive greed? ....those with insurance premiums will buy public option....will be cheaper and guarantee no one gets denied..no precondition ever...and more affordable...nonprofit....

Why does this even matter? The goal is to lower health care costs and to provide coverage to more individuals. If the bill does this than it is good. It should not matter if the public option premiums are more than private, as long as premiums for both are going down in the long run. This is not supposed to be a Government take over right?

What this article does not take into consideration are two important factors:
1) because of the competitive presence of the public option, the premiums for the private plans will be lower, and
2) without the presence of the public option, the private plans would have no incentive to keep their premiums low.
Please state the complete truth. Dealing in half-truths is what makes us doubt journalistic integrity these days.

Why does this even matter? The goal is to lower health care costs and to provide coverage to more individuals. If the bill does this than it is good. It should not matter if the public option premiums are more than private, as long as premiums for both are going down in the long run. This is not supposed to be a Government take over right?

All sane people realize that the medical system needs an over-haul. But is it necessary and cost effective to redo the entire system? If you get a flat tire; do you quickly rush to purchase a new tire, or do you first determine if the tire can be repaired, if it can just fix it. I think this dilemma is a no brainer. This country was built upon individualism and not government intervention. Inteligence not politics is the answer.

the frigging government is corrupt, you could easily perceive them as merely stupid...but it is we who are stupid to let them keep feeding us their crap...while they fashion their takeover by dangling candy treats to the gullible.

Oil is getting ready to surge, the huge deficit we already have is going to kick in inflation and higher interest rates, groceries are going up and half the people I know are looking for work. These folks are nuts. The rich will find a way, the very poor may see some benifit; but, the middle class working folks will get his and we soon will all be BROKE. These folks don't care and when the whole plan goes up in smoke, they will run and hide and find someone to blame besides themselves. God help American

Hey reich wingers, go ahead and continue to let yourselves be ripped off by the greedy insurance companies. The public option will be implemented to make sure that the cost of insurance goes down. President Obama said himself that he won't sign a bill that fails to lower the cost of insurance. But all you neo creeps who hate a government health option can go ahead and fork over thousands of dollars to the corporate blood suckers if you want too.

Well the public option will be a ceiling. It still saves 20 bil with the weak version.
But if righties read the bill the public option will expand and the more people it enrolls the cheaper the premiums will be.

Hey Left wingers. Explain how it makes sence to spend $166,666 per person times 6,000,000 people?
This is the gov't economic genious that brought you cash fo klunkers, which cost taxpayers $24,000 per car. Instead of burning gas in our cars, we should convert to dollar bills, it would make as much cents.

John @ 7:01--The point you are missing is that everyone agrees that insurance premiums will go up across the board if companies are forced to cover everyone. My agent who I have known for over 20 years told me yesterday if healthcare passes in the form is in now, I can expect my private plan premiuns which is just a standard plan to go up over 50% in about a year.

One can not solve a problem until the problem has been identified.
Pelosi et al. have only muddied the waters. What exactly have they been trying to accomplish over the last 8 months? What is the "healthcare problem" they have been trying to fix? High cost? This bill increases costs. More insured? This bill forces insurance on those who have chosen not to have it. Better care? We started out with the best.
One can only conclude that Pelosi and her cronies are a pack of idiots leading a gang of fools...

People are lining up 1,000 deep for government managed seasonal flu and swine flu immunizations only to find that after hours of waiting there isn't enough.
My doctors office can't say when and if they'll have flu shots anytime soon. Dozens of public flu shot offerings have been cancelled in Milwaukee, WI because the flu shots never arrived or just a few came through.
What does this have to do with the Dem's overhaul? Flu shots are managed through government programs. Suprise, suprise - rationing, mismanagement and shortages abound. And we're dealing with a simple jab. Imagine when the bureaucrats take over the whole deal.
"Nevermind our history; Trust us, we know what we're doing."

To my fellow progressives who don't buy the conclusion: note that the CBO makes two assumptions -- that the public option is likely to have a sicker pool, and less likely to aggressively look for ways to deny care. The first is a reason to make the public option available to everyone not just people who don;t get it through their employers (and also, probably to tie it to Medicare rates). The second problem (the fact that insurance companies will aggressively look to "manage utilization" ie deny care ) is a reason to support single payer, and only single payer.

"this is just like cobra.Its a farce that helps nobody,absolutely nobody."
I know this is only a simple blog and its easy to speak in bumper sticker than really give things thought, but do you have any idea what you are talking about? COBRA has saved millions of families from bankruptcy. It allows millions of people to change jobs and keep their coverage. If you lose your job you can keep your insurance for 18 months. It is one of the most important healthcare reforms in history. It is equivalent to the FDIC and FSLIC, which you probably say you hate, but I am sure you make sure your money is in a FEDERALLY insured bank. We have had the worse recession since the Depression. 100 banks, mostly very small and rural, have failed. It could have been 5,000 if there would have been runs on the banks. Look what happened when the money market funds broke a buck. It took federal guarantees to save your money market.
Why bother?

For the liberals who believe that the US government attacked the trade center on 911, why do you suddenly trust the same burocracies with your life and death health care? Won't we have another president in 4 to 8 years? What if Jeb Bush wins the next one? Do you want him deciding how health care money is spent? Assuming Obama wins again in 3 years, Biden won't win the nomination much less the presidency in 2016. According to Gallop and most other polling firms the country is shifting right polliticaly meaning that the next pressident will likley be a conservative. Do you liberals want to lett a conservative make your medical decisions or take over the considerably expanded role over individual liberty? Don't give a president any more power than you would give an adversary, even one you like.

There is an explanation coming for this. I find it very doubtful that such a huge mistake could be limited to just one paragraph in the CBO report. The assumption of how "less management of utilization by its enrollees" would lead to adverse selection is flawed. Medicare has low administrative costs, too, and lots of utilization (i.e. seniors use health care than anyone else). I wouldn't be surprised if the CBO comes out with a clarification of this that says the exact opposite of what this article says.

Excellent post there #1. This plan doesn't not go into effect until 2013, just some small parts of it go into effect when Obama signs in. From when tthat day is until it is actually enforced we, the taxpayers will be paying for it to stock up money for it. The tax "on the rich" is now at 45%,nearly half. The tax on Cadillac plans will effect many more than one would think.Cadillac plans are quite common,. If your plan includes dental and your company is one of the Fortune 500 companies your have a cadillac plan and you will be taxed on it. Its not just the rich here getting hit up again, its many people making way under the infamous $250,000 Obama said he would never tax. And all companies with over 500 employees will be mandated to cover their employees. I see so many problems here, so many new taxes. If I were rich I would take me and money and leave the country. Where is the incentive to succeed in America? Why bother trying to make good? A mandate to cover insurance on all your employees will only cause more job losses. This is a mess, after reading this article I see nothing good in this bill.

This is what happens when you don't give people real choice. They're assuming only the sickest Americans will sign up, so they're assuming it will mean higher premiums. If you open it up to EVERYONE and not just those who can't get private insurance, it will cost much much less.
Anyone who says "Obamacare" is an idiot. Obama isn't going to give you a checkup, he's trying to provide INSURANCE, not CARE. Stupid.

US Postal Service established in 1775 - 234 years to get it right - it's broke
Social Security established in 1935 - 74 yrs to get it right - it's broke
-Fannie Mae established in 1938 - 71 yrs to get it right - it's broke
-War on Poverty started in 1964 - 45 yrs and $1 Trillion confiscated every year from tax payers and transferred to the poor - has not worked and the country is broke
-Medicare & Medicaid - started in 1965 - 44 yrs. and it's broke
-Freddie Mack started in 1970 - 39 yrs. and it's broke
-Trillins spent on political payoffs called TARP, Stimulus, Omnibus Appropriations in 2009 and none show signs of working, although ACORN has found a new ***** - the American Taxpayers, unemployment is reaching 10% (probably more like 20-30%)
"Cash for Clunkers" established in 2009 and went broke in 2009. Most of the cars bought were foreign and the money went out of the country, and taxpayers paid $24,000 per car.
-Now Congress and President Obama want to take over 16% of the economy to have a government run health care plan?
ARE YOU ALL NUTS - CALL THESE CONGRESS PEOPLE AND SENATORS AND TELL THEM THE ARE FIRED COME ELECTION TIME!!!!!

US Postal Service established in 1775 - 234 years to get it right - it's broke
Social Security established in 1935 - 74 yrs to get it right - it's broke
-Fannie Mae established in 1938 - 71 yrs to get it right - it's broke
-War on Poverty started in 1964 - 45 yrs and $1 Trillion confiscated every year from tax payers and transferred to the poor - has not worked and the country is broke
-Medicare & Medicaid - started in 1965 - 44 yrs. and it's broke
-Freddie Mack started in 1970 - 39 yrs. and it's broke
-Trillins spent on political payoffs called TARP, Stimulus, Omnibus Appropriations in 2009 and none show signs of working, although ACORN has found a new ***** - the American Taxpayers, unemployment is reaching 10% (probably more like 20-30%)
"Cash for Clunkers" established in 2009 and went broke in 2009. Most of the cars bought were foreign and the money went out of the country, and taxpayers paid $24,000 per car.
-Now Congress and President Obama want to take over 16% of the economy to have a government run health care plan?
ARE YOU ALL NUTS - CALL THESE CONGRESS PEOPLE AND SENATORS AND TELL THEM THE ARE FIRED COME ELECTION TIME!!!!!

This simply says that the PO will have higher premiums than private insurance *in the exchanges* created by this new legislation.
It does not say that the PO will have higher premiums than current private insurance. This is a pretty important distinction that I feel is very misleading unless a clarification is provided.

Shame on You! You know that you are taking this quotation out of context and yet still you are doing that.
Where are the concrete fiqures that the public option premiums would be higher? Show us the raw data and fiqures.

"No one seems to understand basic economics. Doctors charge as much as they can because they have to pay malpractice premiums and other fixed expenses. When payments from some types of patients are reduced they can either 1) raise the price on the others or 2) not offer service. Why not consider malpractice insurance reform? Or maybe tort reform?? What generally happens when the government sets a price ceiling for a service is a shortage. Be ready for "even-odd" days at the clinic!"
You expect a government ran by lawyers to do anything but laugh when they see 'tort reform'?

But the question isn't about averages: will the public plan premiums be less than the private plans for those "less healthy" enrollees who go to the public option? Perhaps that public option is what is going to keep the private plans (with their implied "more healthy" enrollees) costs down, and hence allow their premiums to cut down.

If you give them this power they will have the power to say you don't get that treatment because your too old, too sick, too young, wrong race, wrong religion, wrong job, voted wrong, not to mention it's UNCONSTITUTIONAL. You can't let them have this much power. They will say how many children you can have, they want to tell them what to do for a living. Forget free choice in anything.